Q3 2025 Greystone Housing Impact Investors LP Earnings Call
Speaker #3: Greetings and welcome to the Q3 2025 Earnings Call for Greystone Housing Impact Investors LP . At this time , all participants are in a listen only mode .
Speaker #3: A question and answer session will follow the formal presentation . If anyone should require operator assistance during the conference , please press Star Zero on your telephone keypad .
Speaker #3: Please note this conference is being recorded. I will now turn the conference over to your host, Jessie Corey. Please go ahead.
Speaker #4: I would like to welcome everyone to the Greystone Housing Impact Investors LP , NYSE ticker symbol GE . Third quarter of 2025 Earnings Conference Call .
Speaker #4: During the presentation , all participants will be in a listen only mode . After management presents its overview of Q3 2025 , you will be invited to participate in a question and answer session .
Speaker #4: As a reminder , this conference call is being recorded . During this conference call , comments made regarding GF which are not historical facts , are forward looking statements and are subject to risks and uncertainties that could cause the actual future events or results to differ materially from these statements .
Speaker #4: Such forward looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 . Forward looking statements can be identified by the use of words like may , should expect , plan , intend , focus and other similar terms .
Speaker #4: You are cautioned that these forward looking statements speak only as of today's date . Changes in economic business , competitive , regulatory and other factors could cause our actual results to differ materially from those expressed or implied by the projections or forward looking statements made today .
Speaker #4: For more detailed information about these factors and other risks that may impact our business , please review the periodic reports and other documents filed from time to time by us with the Securities and Exchange Commission .
Speaker #4: Internal projections and beliefs upon which we base our expectations may change , but if they do , you will not necessarily be informed .
Speaker #4: Today's discussion will include non-GAAP measures and will be explained during this call . We want to make you aware that is operating under the SEC regulation FD and encourage you to take full advantage of the question and answer session .
Speaker #4: Thank you for your participation and interest in Greystone Housing Impact Investors LP . I will now turn the call over to our Chief Executive Officer , Ken Rosinsky .
Speaker #4: Good afternoon everyone .
Speaker #5: Welcome to Greystone Housing Impact Investors LP's third quarter 2025 investor call . Thank you for joining . I will start with an overview of our portfolio .
Speaker #5: Jesse Khoury , our Chief Financial Officer , will then present the partnership's financial results . I will wrap up with an overview of the market and our investment pipeline .
Speaker #5: Following that , we look forward to taking your questions . Our overall investment portfolio performed steadily during the third quarter . We have had no forbearance requests for multifamily mortgage revenue , bonds and all of our borrowers are current on their principal and interest payments .
Speaker #5: As of September 30th , 2025 , physical occupancy for the stabilized Mortgage Revenue Bond portfolio was 87.8% as of September 30th , which is down slightly from 88.4% as of June 30th .
Speaker #5: The decline is primarily at properties in Texas , where local markets are experiencing higher vacancies due to recent increases in multifamily unit supply .
Speaker #5: We expect occupancies will recover once available units are absorbed and new supply deliveries decline in the near term . Our governmental issuer loans for the financing of affordable multifamily properties continued to progress toward stabilization and ultimately , redemption of our loans .
Speaker #5: Construction and all properties is complete or substantially complete , and leasing velocity is strong . We continue to see progress on the development and lease up of our joint venture equity investments , as well .
Speaker #5: Of our 11 current investments , seven have completed construction and are leasing , two have nearly completed construction and begun leasing activities , and two relate to sites for future development .
Speaker #5: Overall occupancy is increasing across the portfolio as investments near stabilization . Recently , the Vantage at Loveland property was listed for sale and the marketing process is ongoing .
Speaker #5: In 2015 , GHB began investing in joint ventures related to the construction of market rate multifamily properties . Based largely on the overall low interest rate environment and high investor demand for market rate .
Speaker #5: Multifamily properties . These investment structures provided the partnership with the opportunity for attractive returns once properties were fully developed and sold to third parties .
Speaker #5: These investments resulted in uneven earnings for the partnership as the majority of our returns are recognized upon the sale of the respective properties .
Speaker #5: Since the establishment of the joint Venture program , the partnership has realized significant gains on most of the 17 properties sold to date .
Speaker #5: We currently have 11 properties in various stages of development and lease up , which we expect to be sold over the next three years .
Speaker #5: In more recent periods , market conditions such as higher interest rates and higher multifamily capitalization rates began negatively impacting multifamily asset values , resulting in lower returns upon sales of these properties .
Speaker #5: There were no sales of joint venture properties in 2020 for for the two property sales in 2025 , while all capital was returned .
Speaker #5: Our realized returns were much lower than we recognized in prior years . We and our investment Committee believe these challenging conditions will continue to impact market rate .
Speaker #5: JV , multifamily investment profitability for the foreseeable future . We remain positive on the market rate . Seniors housing segment of the market .
Speaker #5: We believe market supply trends , potential resident invested demographics and expected returns remain encouraging . So we will continue to evaluate joint venture equity investment opportunities .
Speaker #5: In the seniors housing segment . The lower in volume than our historic capital allocation to market rate . Multifamily investments . Meanwhile , we also see strong investment opportunities for our traditional investments and tax exempt mortgage revenue .
Speaker #5: Bonds associated with affordable multifamily properties , as well as for seniors , housing and skilled nursing properties . Greystone Strong lending relationships across affordable housing , seniors housing and skilled nursing business lines are also providing investment opportunities for the partnership .
Speaker #5: We believe these tax exempt mortgage revenue bond opportunities will allow the partnership to deploy capital and investments with more predictable returns . Since profitability here is based on the net interest spread between the bond interest rate and our related debt financing rate .
Speaker #5: Additionally , the partnership's newly established construction lending joint venture with Blackrock is expected to provide future tax advantaged earnings as well . Based on these factors , we will be implementing a strategy to reduce our capital allocation to joint venture equity investments in market rate multifamily properties going forward .
Speaker #5: We and the respective managing members will manage our remaining portfolio of market rate multifamily investments to maximize sales , prices and returns to the extent possible with our return of capital from the sale of these investments being redeployed primarily into tax exempt mortgage revenue , bond investments .
Speaker #5: We believe this change in investment strategy provides three key benefits to our unitholders . First , by their nature , our tax exempt mortgage revenue bond investments earn stable returns based on the net interest spread between the bond interest rate and our related debt financing rate .
Speaker #5: As a result , we expect increasingly stable earnings as compared to the uneven returns on joint venture equity investments due to the income being realized primarily upon property sales .
Speaker #5: Second , in recent years , the majority of income allocated to our unitholders has been taxable because of the taxable income from joint venture equity investment sales .
Speaker #5: As we allocate more capital to tax exempt mortgage revenue , bond investments . We expect that the proportion of income allocated to our unitholders , that is tax exempt for federal income tax purposes will increase in the long term .
Speaker #5: In the near term , potential gains from sales of our remaining market rate , multifamily JV equity investments will continue to generate taxable income for unitholders .
Speaker #5: Third , we are investing capital in improvement asset class . Excuse me , proven investment class . That is core to our operations that also leverages the strong relationships and knowledge base of Greystone's other lending platforms .
Speaker #5: We and the Board of Managers will continue refining our operating strategy in the coming quarters. We in the Board of Managers are also assessing the potential impact, if any.
Speaker #5: This change in strategy will have on our short term and long term earnings expectations and future unitholder distributions , with a focus on the long term benefit to our investors and we look forward to providing additional details on our strategy and updates on our progress in future communications and on future earnings calls .
Speaker #5: With that , I will turn things over to Jessie Cary , our CFO , to discuss the financial data for the third quarter of 2025 .
Speaker #4: Thank you . Ken . Earlier today , we reported earnings for our third quarter ended September 30th . We reported net income of $2 million , or $0.03 per unit , basic and diluted , and we reported cash available for distribution or CAD , a non-GAAP measure of 4.6 million , or $0.20 per unit .
Speaker #4: Our book value per unit as of September 30th was on a diluted basis , $12.36 , which is an increase of $0.53 from June 30th .
Speaker #4: The increase is primarily the result of an increase in the unrealized gain on our mortgage revenue . Bond portfolio during the quarter . I will note that this metric is based on our joint venture equity investments at carrying value .
Speaker #4: As a result , it does not include any potential gains or additional income that may be realized upon transactional events in the future .
Speaker #4: As of market close yesterday , November 5th , our closing unit price on the New York Stock Exchange was $8.24 , which is a 33% discount to our book value per unit .
Speaker #4: As of September 30th . We regularly monitor our liquidity to fund our investment commitments and to protect against potential debt deleveraging events . If there are significant declines in asset values .
Speaker #4: As of September 30th , we reported unrestricted cash and cash equivalents of $36.2 million . We also had approximately $88.6 million of availability on our secured lines of credit .
Speaker #4: Also in October 2025 , we issued series B preferred units to a new investor for gross proceeds of $5 million , which I will comment on later .
Speaker #4: At our current liquidity levels , we believe that we are well positioned to fund our current financing commitments . We regularly monitor our overall exposure to potential increases in interest rates through an interest rate sensitivity analysis , which we report quarterly and is included on page 103 of our form 10-q .
Speaker #4: The interest rate sensitive sensitivity table shows the impact on our net interest income , given various changes in market interest rates and other various management assumptions .
Speaker #4: Our base case uses the forward Sofr yield curve . As of September 30th , which includes market anticipated Sofr rate declines over the next 12 months .
Speaker #4: The scenarios we present assume there is an immediate shift in the yield curve , and that we do nothing in response for 12 months .
Speaker #4: The analysis shows that an immediate 100 basis point increase in rates will result in a decrease in our net interest income in CAD of approximately $1 million , or 4.4 cents per unit .
Speaker #4: Conversely , a 100 basis point decrease in rates across the curve will result in an increase in our net interest income in CAD of approximately $1 million , or 4.4 cents per unit .
Speaker #4: We consider ourselves largely hedged significant fluctuations in our net interest income from market interest rate movements in all scenarios , assuming no significant credit issues .
Speaker #4: Our debt investments portfolio consists of mortgage revenue , bonds , governmental issuer loans , and property loans that totaled $1.26 billion as of September 30th , or 85% of our total assets .
Speaker #4: We own 82 mortgage revenue bonds as of September 30th . That provide permanent financing for affordable multifamily seniors and skilled nursing properties across 12 states with concentrations in California , Texas and South Carolina .
Speaker #4: We own four governmental issuer loans as of September 30th that financed the construction or rehabilitation of affordable multifamily properties in two states . During the third quarter , we funded approximately $27 million of our mortgage revenue bond .
Speaker #4: Governmental issuer loan , and related commitments , which was offset by redemptions and paydowns of approximately $29 million in the normal course . Our outstanding future funding commitments for our debt investments totaled $20.3 million as of September 30th .
Speaker #4: Before related debt proceeds and excluding one investment , we expect to transfer to our construction lending joint venture with Blackrock . These commitments will be funded over approximately 12 months and will add to our income producing asset base .
Speaker #4: We have had no forbearance requests for mortgage revenue , bonds and governmental issuer loans , and all of our borrowers are current on their principal and interest payments .
Speaker #4: As of September 30th . Our reported provision for credit losses was $596,000 for the third quarter , primarily related to a support loan to an Mrb borrower .
Speaker #4: As mentioned in our call in August , we reported asset specific provisions for credit losses in the second quarter related to three 501 C3 non-profit mortgage revenue bonds by properties in South Carolina .
Speaker #4: The rehabilitation of each property has been completed and each property is working to stabilize operations . The property operating results have not met the originally underwritten levels .
Speaker #4: We continue to have discussions with the owners regarding options to improve property operations and potential refinancing and sales options to maximize the value of our mortgage revenue.
Speaker #4: Bond investments . Our market rate , joint venture equity investments portfolio consisted of ten properties as of secured approximately $154 million , exclusive of one investment .
Speaker #4: Vantage at Marcos that is consolidated basis . A remaining funding commitments for JV equity investments totaled $19.5 million as of September 30th . All remaining commitments relate to sites being considered for future development .
Speaker #4: We only fund these commitments if a construction contract is signed and construction commences . The managing member may also choose to sell the sites and terminate our related funding commitments .
Speaker #4: Recently , the Vantage at Loveland property was listed for sale and the marketing process is ongoing . We reported our proportionate share of operating losses from these investments , which totaled $1.3 million during the third quarter .
Speaker #4: Our joint venture equity investments by design typically incur operating losses during development and lease up . Such losses are incorporated into the development budget for each project and are typically funded by interest , reserves and construction loan proceeds .
Speaker #4: We add back these proportionate losses to net income when calculating CAD , as they are reported on a primarily a result of depreciation expense and are expected to be recovered upon future transactional events .
Speaker #4: On the liability side of our balance sheet , our debt financing facilities are used to leverage our investments and had outstanding principal balances totaling $1.02 billion as of September 30th .
Speaker #4: This is down approximately $9 million from June 30th . We manage and report our debt financing in four main categories . On page 97 of our form 10-q .
Speaker #4: Three of the four categories are designed such that our net return is generally insulated from changes in short term interest rates . These categories account for $813 million , or 79% of our total debt financing .
Speaker #4: The fourth category is fixed rate assets with variable rate debt with no designated hedging , which is where we are most exposed to interest rate risk in the near term .
Speaker #4: This category represents $212 million , or 21% of our total debt financing . Of this amount , $153 million is associated with debt investments that are scheduled to mature on or before April 20th , 26 , which will repay the outstanding debt financings .
Speaker #4: As such, we expect the unhedged period to be relatively short. On the preferred capital front, we successfully issued $5 million of Series B preferred units to a new investor in October 2025.
Speaker #4: We intend to use the net proceeds from this offering to acquire additional investments , fund our existing investment commitments and support general partnership operations .
Speaker #4: I'll now turn the call back to Ken for his update on market conditions .
Speaker #5: Thanks , Jesse . The third quarter of 2025 saw some improvement in the performance of the US municipal bond market . At the time of last quarter's call in August , ten year MMD was at 3.21% and 30 year MMD was at 4.58% .
Speaker #5: At the end of September , those levels were at 2.92% and 4.24% , respectively , which were both a little over lower . Following the Q3 fixed income market rally .
Speaker #5: As of yesterday's close ten year , MMD was at 2.78% and 30 year MMD was at 4.18% . The ten year Muni to Treasury ratio was currently 67% , and the 30 year Muni to Treasury ratio is currently 88% .
Speaker #5: Both improved from last quarter's levels . The trend of heavy muni bond issuance that began last year continued into the third quarter of 2025 , and funds flows into the muni market remains high .
Speaker #5: These positive trends in the muni market were reflected in the increase in unrealized gains for the quarter . In our core mortgage revenue , bond portfolio .
Speaker #5: The continued federal government shutdown so far hasn't had a significant impact on either the broader US municipal bond market or the performance of our mortgage revenue bond portfolio .
Speaker #5: As we move further 30 basis points into November , we may begin to see issues with section eight rent subsidy payments from HUD to individual project owners .
Speaker #5: Only 9% of our debt investments are secured by projects receiving section eight subsidies . The federal low Income Housing Tax Credit program is not impacted by the shutdown , as US Treasury makes a full allocation of both tax credits and private activity bond volume cap to individual state allocating agencies on January 1st of each year , with no further action by a federal agency required .
Speaker #5: With that , Jesse and I are happy to take your questions .
Speaker #3: Thank you . We will now be conducting a question and answer session . If you would like to ask a question , please press star one on your telephone keypad .
Speaker #3: A confirmation tone will indicate your line is in the question queue . You may press star two . If you would like to remove your question from the queue for participants using speaker equipment , it may be necessary to pick up your handset before pressing the star keys .
Speaker #3: In our first question comes from Matthew Erdener with Jones Trading .
Speaker #6: Good afternoon . Thanks for taking the question . As always , appreciate the comments as well . You know , I want to talk a little bit about capital allocation .
Speaker #6: So , you know , as these multifamily units kind of sell off and get redeployed , do you guys have a allocation target percentage in mind ?
Speaker #6: I know you mentioned the senior housing kind of carrying that lower percentage than the multifamily . You know , so I was just wondering if you guys have any idea of where you want to sit out at .
Speaker #5: Hi , Matt , it's Ken , I think from our perspective , a lot of that's going to be driven by the timing of when the capital comes back to us from those existing JV equity exits , as well as the opportunities that we're currently seeing at the time .
Speaker #5: As I mentioned , during the remarks , we expect our capital allocation going forward to any joint venture equity investments that we do in the senior housing space to be lower than the current level that we have committed to our JV equity .
Speaker #5: Our JV equity investments , but we don't have a set percentage at this point in time from , from the board or from a management team perspective .
Speaker #5: In terms of what that looks like , it'll really be on a case by case basis .
Speaker #6: Got it . And then could you talk a little bit about , you know , I guess it kind of sits more on the , on the JV partner side , but just the expected pace of asset sales and kind of where you guys sit today in terms of occupancy stabilization , I know you touched on this a little bit earlier , but you know , I guess going forward , you know , as these things kind of do stabilize , you know , it seems like the timeline has been extended .
Speaker #6: So , you know , just from a modeling perspective , you know , should we expect these to , you know , take a little more time to sell than , you ?
Speaker #6: What we saw in 21 through 23 .
Speaker #5: Well , I think Matt , looking at current conditions , we do have the advantage of Loveland property listed for sale . But as we look at some of the other assets in the portfolio , I believe we have in the 10-q , the the reported occupancy for where those assets are , you know , as we mentioned about in particular , the Texas markets , we've seen , you know , sort of slower leasing activity there and , and needing to get to that critical 90% occupancy level , typically before our partners have engaged and investment sales firm to list those properties for sale .
Speaker #5: You know , that's a key part of the timeline there as well . So I think as always , we're going to do everything we can with our with our partners to optimize the result that we get here .
Speaker #5: And look at the overall market trends in terms of supply of units , other available listings in the submarkets , and where interest rates are .
Speaker #5: When we determine what the proper time is for a property to be listed for sale .
Speaker #6: Got it. Thank you. I appreciate the comments.
Speaker #3: Our next question comes from Chris Mueller with Citizens Capital Markets .
Speaker #7: Hey guys . Thanks for taking the questions . So I guess on the strategic shift away from the JV investments , do you guys have any expectations for what the pickup in earnings would be from redeploying that capital ?
Speaker #7: Or is the benefit more coming from the stability of earnings?
Speaker #5: I think from our perspective , Chris , as we chatted about in my in my comments , I think the two big benefits that we see are are number one , the , you know , the elimination of the of the lumpiness on a quarter over quarter basis that we've seen based on the the income recognized from the those investments , basically largely occurring upon the upon the sale date .
Speaker #5: But then also the increased level of of tax exempt income that the partnership will be earning on those new tax exempt mortgage revenue bond investment opportunities .
Speaker #5: So I think it's I think it's too early for us to give you any kind of guidance in terms of of what that , you know , what , if any , pickup there might be as a result of that .
Speaker #5: But we're excited about the opportunities that were that we're seeing , you know , we think it'll be a good investment profile for the partnership as a whole , based on primarily on those two factors .
Speaker #5: And so we're looking forward to becoming more active lenders again as we rotate this capital away from the JV equity investments . .
Speaker #7: Got it . And it sounds like you guys would still be willing to make JV investments in the senior housing side of things .
Speaker #7: Should we expect to see a pickup in investment here , or is that more so , just not part of the wind down strategy ?
Speaker #5: I think it's really more the latter at this point in time . Chris . I mean , we have the one existing seniors housing investment in the village at Carson Valley transaction .
Speaker #5: You know , I think the from the occupancy data , you can see there that that project has , has moved . Well through the construction and the initial lease up phase .
Speaker #5: So I think at a at a high level with regard to that asset , we're not seeing the same challenges in the seniors housing market space that we're seeing in traditional market rate multifamily , you know , strong investor demand for those assets , both on the the operator side and on the private equity side .
Speaker #5: We're seeing strong demographic trends in terms of , you know , more and more seniors needing care . And we're seeing , you know , more opportunities going forward in terms of , you know , as that universe of of I guess , age appropriate people grows , that there'll be more demand for that for that type of of lifestyle .
Speaker #5: So I think , at least from our perspective , we see a much different set of of sort of macro dynamics in that asset class than in traditional market rate multifamily .
Speaker #5: So that's why we're going to to look opportunistically there .
Speaker #7: Got it makes a lot of sense . And I think I just missed what Jesse said . The book value figure was in the quarter .
Speaker #7: If I could get that .
Speaker #4: Yes , $12.36 .
Speaker #7: 36 . All right . Thank you very much . And thanks for taking the questions .
Speaker #5: Thanks , Chris .
Speaker #3: And as a reminder , if you would like to ask a question , please star
Speaker #3: And as a reminder , if you would like to ask a question , please press
Speaker #3: and we'll go next to Rick Stone , private investor .
Speaker #8: Hello .
Speaker #5: Yes , hello continue .
Speaker #9: Oh hi there . Oh , sorry . It's Vic , actually , I thought you were talking to somebody else . I had a question about the cap rates .
Speaker #9: 22 or so . They were some of the lowest cap rates almost ever . You know , we chose to make a decision to invest at that time .
Speaker #9: What makes you think that the senior investments are going to be good now ? Are we seeing higher cap rates on those right now or are they also low ?
Speaker #5: So just just to be clear . Mr. Stone , we did not purchase any properties during that time period . We made investments in to be built properties .
Speaker #5: So it's not like other investors where we were buying properties at , you know , at cap rates based on a certain income stream that they were currently generating .
Speaker #5: You know , everything was on a everything was on a pro forma basis in terms of what our expectations were about . The income level that the projects would generate upon stabilization and our , you know , our projections and our partners projections about , you know , what the markets for those properties would be at at that point in time .
Speaker #5: So I just wanted to make clear on that , that we were not necessarily buying stabilized assets there , but I mean , historically , there are always is a spread between cap rates on seniors housing properties and traditional multifamily because they are viewed by the market as a , you know , as a riskier asset class .
Speaker #5: But I think just in and of itself , the fact that cap rates are higher on on seniors housing property than on traditional multifamily properties doesn't mean that it's not a potentially attractive asset class for us when we can find us via our partners .
Speaker #5: Good development opportunities in good markets where we think the risk adjusted returns to us will be appropriate and will will meet our criteria for making an investment like that .
Speaker #5: So I think that's the that's the philosophy we we've always had in this asset class . And and that's the philosophy that we'll continue to have moving forward as we evaluate this smaller group of potential JV equity opportunities .
Speaker #9: So , I mean , it just makes sense that when the spreads are low , that in general it's riskier overall . And I think we're seeing that as a result in the last couple years on our joint venture partnerships , we're not doing as well as we did in the past .
Speaker #9: So I'm just wondering , just the senior opportunity that you're looking at right now , what are the cap rates that we're seeing compared to its own history , not compared to multifamily , but compared to its own history ?
Speaker #9: Are we seeing levels that are higher than before ? Are they lower now ? Are they right in the middle ? Because that seems to be a good indicator of just general risk .
Speaker #9: And our ability to exit our joint venture partnerships in the future ?
Speaker #5: I mean , what I would say is that as a general rule , if you compare where the market sits today versus where the market was three years ago , across every real estate investment class , multifamily seniors office , retail , hospitality cap rates are generally higher today than they were than they were then .
Speaker #5: So I think just as a as a , as a basic fact that that's where the market sits today . But again , you know , we're looking at opportunities where construction would , you know , would start at some point in time in the future with based on our , our typical investment horizons , looking for liquidation to happen , you know , anywhere from three and a half to four years into the future .
Speaker #5: So , you know , it's really hard for me to sit here today and make a forecast for you as to whether or not I think cap rates in any particular real estate asset class are going to be higher or lower four years from now than they are today .
Speaker #9: But you could agree when they're at all time lows , as it was a few years ago . In general , is usually a riskier time .
Speaker #9: Correct ?
Speaker #5: Well , certainly there's more opportunity for , you know , for movement to the downside than there is to the upside . If you're starting at a relatively low , you know , starting point for your cap rate assumption , I mean , as a as a general principle , I would agree with that .
Speaker #9: I appreciate I appreciate your time .
Speaker #3: And moving on to John Cullinane with UBS .
Speaker #10: Great . Thanks for taking my call . Can you hear me ?
Speaker #5: Yes , we can .
Speaker #10: Okay . Great . The provision for credit losses . I guess I'm still trying to understand you have credit losses in the third quarter , even though the municipal bond market basically rates came down .
Speaker #10: Can you just talk about that ? And I missed the call last quarter about the the big credit loss allocation provision . But those that's the big number that stands out in your returns .
Speaker #10: Your revenue . And so just trying to understand that where that comes from .
Speaker #4: John this is Jesse . I could take that one . So I'll start with Q2 just to set the stage . So as we mentioned on Last call and I and I alluded to in my prepared remarks , this call , we took a roughly $8.7 million provision for credit loss against three specific mortgage revenue bond properties located in South Carolina .
Speaker #4: So these were properties that had asset specific performance performance issues that weren't quite meeting underwriting goals . And collateral values were were down from our underwriting .
Speaker #4: And so based on the information that .
Speaker #10: Please go ahead . Sorry .
Speaker #4: So based on that information and the performance of those properties at that time , we we under the accounting guidance , made a provision for expected potential shortfalls in cash flows based on the information we had , which was a surprise asset .
Speaker #4: That is a provision for credit loss . That is not originally a realized credit loss . If the properties can be managed to the point where there's a recovery in that value , we may get out whole on that investment .
Speaker #4: But under the accounting guidance , you are required to take a provision at that time if that is uncertain . So in Q3 there there is a support loan that is related to those three properties where we took an additional asset specific reserve of roughly $600,000 for those same properties .
Speaker #4: If you take out that specific provision for credit loss , we had no provision in the third quarter . It was essentially flat because the quality of our portfolio stayed consistent .
Speaker #10: Okay . And the the support loan was to the same three entities .
Speaker #4: It was to the the 501 C three owner . That is the borrower on all three properties .
Speaker #10: Okay , okay . And but you say in your remarks that there's no request for forbearance . That's in the rest of the portfolio .
Speaker #4: Correct .
Speaker #10: Okay . All right . Thank you .
Speaker #3: This now concludes our question and answer session . I would like to turn the floor back over to Ken Rodzinski for closing comments .
Speaker #5: Thank you very much , everyone , for joining us today . We look forward to speaking with you again next quarter .
Speaker #3: Ladies and gentlemen , thank you for your participation . This does conclude today's teleconference . You may disconnect your lines and have a wonderful day .